What is a Savings Plan?
Savings Plan is typically a life insurance product that allows you to save and create a corpus to meet your future needs. These are intended to assist policyholders in developing a regular savings habit while also providing considerable returns when needed. Savings plans also provide insurance coverage, ensuring that your family's financial needs are satisfied even if you are not there to provide them. Most saving plans in India such as child savings plan provide a specified amount of maturity benefit when the policy ends. Some savings policy additionally provides a steady income throughout the policy duration or as a portion of the maturity proceeds.
Key Features of Savings Plan
- Assured Maturity Benefits
Savings policy includes a guaranteed maturity benefit (as per the terms and conditions of the policy). As a result, your savings will be more secure and sound. The best saving plan also includes guaranteed (as per the terms and conditions of the policy) incentives that boost the maturity corpus, allowing you to reach your financial objectives faster.
- Fixed Returns
A saving plan includes a guaranteed maturity benefit. As a result, your savings will be more secure and sound. Some of the best saving schemes in India also offer guaranteed add-ons and benefits (bonuses) that increase the maturity corpus, allowing you to reach your financial objectives faster.
- Tax Savings Plan
Tax saving is a default feature of a saving plan. All taxes are exempted (under Section 10 (10D) of the Indian Income Tax Act, 1961) on the death and maturity benefits, hence maximising your savings. However, all tax benefits are as per Income Tax Act, 1961, and are subject to amendment from time to time.
- Flexible-Premium Payments Options
A saving plan lets you pay your premiums on a monthly, quarterly, half-yearly or annual basis.
- Policy Tenure
Saving plans provides an option to customise your policy duration according to your specific needs.
- Entry Age
A saving plan offers a broader entry age for policyholders. The entry age of the policyholder helps in evaluating his/her risk capacity. It further helps in customising the savings based on your risk profile.
- Life Cover
Saving plan offers you the benefit of life insurance coverage along with the guaranteed sum assured (as per the terms and conditions of the policy).
- Multiple Rider Options
You can include multiple riders or add-ons to your policy to get full coverage. Along with their substantial life coverage, the rider will help improve the policy's overall financial protection against accidental death, life-threatening illnesses, and disabilities. Riders are not mandatory and available at an additional cost.
Benefits of a Savings Plan
- Financial Protection
During the policy's duration, a saving plan protects your dependents (family members) financially. Even if anything unexpected occurs to you, your family will be financially secured and will be able to live a stress-free life.
- Payout Option
Money saving plans are a type of budgeting tool. These conventional insurance policies assist you in evaluating future requirements, determining when an infusion of cash would be the most beneficial, and staggering your pay-outs so that you receive your money when you need it the most. You have the option of receiving your payments in monthly, yearly, or recurring instalments.
- Guaranteed sum Assured in any circumstances
A standard insurance saving plan in India serves a dual purpose, whereas a pure protection plan is a specialized life insurance product. Not only you obtain life insurance, but you also get guaranteed returns(as per the terms and conditions of the policy) when the policy matures.
- Retirement Savings
Saving plan can be used to create a retirement fund. You can turn a monthly money saving plan into a powerful retirement savings engine by portioning a small sum at regular periods. Over the period of 30 or so years, a savings plan can accumulate a sizable sum that can be utilized to fund a pension during your retirement.
- Income Tax Saving Benefits
Saving plans are incredible tools to save tax. According to current income tax laws, some tax benefits may be available on premiums pay-outs and payments received under an assured income plan. However, tax laws are subject to amendments from time to time.
- Added Bonuses
A guaranteed savings plan could provide you with various additional rewards, ranging from a simple grantor bonus to a terminal bonus.
- Policy Loan Option
You can take a loan against a savings policy once it reaches its specified amount. Policy loans provide lower interest rates than other types of loans. If you need money right away, a policy loan option might help you make the necessary arrangements
Why Do You Need a Savings Plan?
With the uncertainty surrounding health, the environment, and occupations, the need for life insurance has expanded exponentially in recent years. Unexpected events such as accidents, illness, or death can not only take your life, but they can also leave your dependents without an income and financial support to meet emergencies and necessities such as paying off debts or future planning.
A saving plan provides a built-in death benefit that assures your policy's dependents are financially secured even in your absence. If you are the only breadwinner and your family relies on your income, this becomes much more important. Even if you die unexpectedly, a saving plan will keep them financially secure for their daily requirements and assist them in paying off debts.
Saving plans help you develop a disciplined savings habit by requiring you to pay the premium regularly. This will ensure that you set aside a set amount at predetermined intervals. They assist you in budgeting your present spending while assuring that you have sufficient funds set aside for the future. It also provides a fixed amount of maturity after the policy term, allowing you to plan for life goals such as purchasing your dream home.
Use a wise savings strategy to meet long-term financial goals such as a child's schooling or marriage. Some money-saving schemes also provide a consistent stream of money during the plan's lifetime, allowing you to supplement your income and live a healthier lifestyle.
It can help you achieve your goals while also saving money on taxes throughout your life. Because saving plans have many benefits, you may pick the one for you based on your risk tolerance and future financial needs. A saving plan is a crucial instrument for building wealth and guaranteeing financial security for your family, regardless of your age.
A child saving plan is a necessary saving plan in today’s time. It not only financially secures your child’s future but also gives you the benefit to invest your money. Moreover, this plan comes with some of the best tax saving schemes in today’s time. One of the tax saving schemes under a child saving plan can help the policyholder claim upto Rs 1.5 lakhs of tax benefits as mentioned in Section 80C of the Income Tax Act, 1961. However, please note that tax laws are subject to change from time to time.
Factors that Can Affect Premiums of your Savings Plan
There are various factors that affect the premiums of your savings plan. Some of them are :
- Smoking habit
- Your occupation
- Sum assured you have chosen, etc.
Who Should Buy a Savings Insurance Plan?
Every person should develop the practice of saving for a rainy day. Putting money aside is necessary whether you are married or single, young or old. You have the option of leaving your money in your bank account or investing in a saving plan that puts your money to work without jeopardizing the corpus you have built up. Make the right choices for your financial situation.
It's a good idea for people who want to accumulate money to acquire large assets every three to five years. In the event of an insured's death during the policy term, the plan pays the beneficiary the full amount of the sum assured, regardless of the survival benefits provided until the insured's death.
Buying a conventional life insurance saving plan is a good choice for :
Recently married couples
Parents who are young and have children
People on the verge of retirement
When Should One Buy a Savings Plan?
Most of the time, people do not get the significance of saving money at an early age. Here are some points stating the importance of getting a savings plan money at an early age :
- If you start to save money at an early age, it assures you a secure old age. At a young age, people do not have many expenses. But with time responsibilities increase, and so do the expenses. Thus, it is better to get a savings plan at a young age. Moreover, getting a savings plan at a younger age can lower your payable premium amount.
- If you start saving money at mid-age or when you are nearing your retirement, then you will have to work hard and save more as you do not have much time. So, saving at an early age gives you the scope to save less and flexibility to manage other expenses.
- One expects to spend their time relaxing leisurely after retirement. So, starting to save money at an early age allows you to save a lot of money for retirement and lead a relaxed and secured life after retiring.
Reasons to Buy Money Savings Plan
Savings Emergency Funds
It's critical to set up emergency funds to handle unexpected expenses such as an unexpected auto repair, high medical expenditures, or a job loss. If you were to lose your job or face issues with your business, you'd be glad to have some money aside in an emergency fund to help you get by until you find something else.
Even if you have insurance, unforeseen medical bills might arise, and an emergency fund can help you handle them. An emergency fund is your next alternative if you don't have access to a health savings account.
Retirement is another key reason to save money. The sooner you begin saving for retirement, the less you'll need to save later.
Down Payment for a House
Set some money aside for a down payment on a house. Then, you can avoid mortgaging private things or running after the loan providers to seek a private loan with higher interest rates. With some of the saving plans, you can get better interest rates on a home loan. It can also help you borrow less money, making your mortgage payments more manageable.
Save for a Vacation, Car, or Other Big Purchase
Your savings aren't only for things you need; they can be for things you want, too. Saving up for a big purchase in advance means you won't pay extra finance costs such as interest & fees. For example, instead of taking a car loan, you might save enough for a new automobile and pay for it all at once. Then you won't have to pay for a car . You could even be able to get a better deal if you pay in full right away.
Irregular or Recurring Expenses
You know you'll have large bills coming up, even if you don't know how much they'll cost or when they'll happen . Create a sinking fund to meet these costs. Sinking funds are placed aside for predictable future costs such as taxes, holiday gifts, automobile repairs, home improvements, and other unforeseen expenses. These additional savings can help you avoid having to use your emergency fund.
Education or Marriage
Don't forget to save some money for your child's education or marriage. The saved money will help them opt for a career of their choice and help you marry your children without worrying about extra expenses.
Tax Saving Scheme
Saving plan offer the tax benefits to the policyholder. The policyholder can claim upto Rs. 1.5 lakhs as tax benefits under Section 80C of the Income Tax Act. However, tax laws are subject to change from time to time.
Why Choose Bharti AXA Life for Savings Plan in India?
Bharti AXA Life Saving Plans are life insurance plans that allow you to save and increase your money in a variety of ways. These online money-saving plans assist you in systematic and disciplined savings, ensuring that you and your family meet your financial objectives.
After considering your specific financial condition and future demands, Bharti AXA Life's best saving plan in India assists you in making considerable savings and growing your wealth. They also take care of your family and ensure that all expenses are covered even if you are not present.
Bharti AXA Life insurance plans offer an extensive range of saving plans in India, with benefits such as premium payout flexibility, death benefit and tax advantages. Some life insurance plans additionally include an assured lump sum payout at the end of the term. Furthermore, Bharti AXA Life's Tax Calculator is a very convenient and easy tool to assist you in calculating the amount of tax due and selecting the plan that suits your needs.
Here are the reasons for choosing Saving Plan from Bharti AXA Life -
Assurance of Guaranteed Benefits (as per the terms and conditions of the policy)
Comfort of Protection
Savings combined under a Single Plan
Flexibility in Premium Payment Terms
Benefit Payout Structures
Option to Choose the Payout Premium Tenure
Lumpsum Benefits and Additions
Multiple Savings Plan options to Choose
Income Tax Saving benefits
Simple Steps to Buy Saving Plans Online
Saving plans are life insurance products designed to assist you in making regular and disciplined savings and financially protect your family in the event of your untimely death. You can now purchase a saving plan without having to go to an insurer's or agent's office. Instead, you may find all the information concerning savings plans on the internet.
Research for the plans that are suited to your needs, check your eligibility, submit the required documentation and make the payments all online. Policies are normally sent via email, but you can also receive notifications on your phone.
Here are some easy steps to buy a saving plan online.
- Determine your financial objectives and needs. Determining the estimated amount of money that you'll need for a major purchase in the future or the money you'll need to support your dependents when you're gone will help you determine the sum that needs to be guaranteed income (as per the terms and conditions of the policy).
- Conduct detailed research. Usually, insurers describe their multiple saving plans, including benefits, features, inclusions, and exclusions. Before you purchase a saving plan, check the fine print on claim settlements and other terms and conditions.
- Conduct risk assessments on the insurer you've chosen to assess its financial strength, service quality, reputation, discounts and reviews.
- Review the eligibility requirements, such as the policy's income ranges, min & max ages, and numerous proofs required to purchase a savings plan online.
- Fill out the online forms and attach any necessary proofs, such as age, identity, evidence of address, identity, and income.
- You'll get the policy materials through email, as well as proper notifications on your phone. Keep track of all your investments in a folder so you can refer to them quickly in the event of a crisis.
How to Choose the Right Savings Plan?
To select the saving plan in India, you must first comprehend your individual financial needs, aspirations, and risk tolerance. Here are some guidelines to assist you in choosing the traditional insurance policies for you :
- Determine your financial objectives
Our priorities keep on shifting at each age of our life. Therefore, it is important to understand your short and long term savings plan objectives, as well as the time it will take to attain them. Make a list of your financial requirements for today, the next few months, and later in life. This will assist you in determining how much you need to save to achieve the sum you desire in the future.
- Compare Different Plan Features
It is critical to select a conventional insurance plan that is well-suited for your current life stage as well as your long-term goals. Know the terms of the saving plans you are going to choose. Consider features that are effective and will grow to suit your future needs. Make sure that your selected saving plan allows you to reach your financial goals in an emergency. Look into the possibility of taking out a loan against the funds. Additionally, try expanding your life insurance coverage by selecting the appropriate riders.
- Consider Different Riders Options
Research into multiple rider options to get more benefits and maximize your policy's coverage. Evaluate the features and benefits of the saving plan you want to opt for whether it can meet your needs and risk tolerance. To choose the right plan, you must understand the rider options that come with various plans. Go through the fine print to learn about the eligibility criteria, inclusions and exclusions, and the documentation you will need to purchase the saving plan so that you can make an informed decision.
- Select Your Saving Time frame
Fix your tenure as per your short-term, or long-term savings plan goals and financial requirements to select the saving plan. Additionally, having a time frame in mind ensures that your coverage is available when you need it most. Evaluate your conventional insurance options and expand your financial plan.
Types of Savings Plan We Offer
Bharti AXA Life Smart Invest Guaranteed Plan
- A non-linked, non-participating individual savings life insurance plan
- Guaranteed Financial Returns (Provided policy is in force and all due premiums have been paid)
- Option to choose from 2 plan variants
- Flexibility in Policy Term/Premium Payment Terms
Bharti AXA Life Guaranteed Wealth Pro
- A non-linked, non-participating individual savings life insurance plan
- Flexibility to choose the payout structure
- Multiple income options
- Option to receive tax free income beginning from the second policy year itself
- Option to get lifelong income along with life cover till 100 years of age
Bharti AXA Life Shining Stars
- Non-linked, non-participating limited pay endowment Life Insurance plan
- Designed to take care of the financial needs of your child.
- Flexibility to opt between 2 Maturity Payout Options
- Flexibility in Policy Term/Premium Payment Terms
- A great short-term investment option for a child insurance policy.
Savings Plan - Frequently Asked Questions (FAQs)
When is the right time to begin a saving plan?
When you think of investing in financial products, the sooner you get started, the better. The power of compounding assures that even if you invest small amounts over a longer period, your returns will significantly exceed your expectations. In addition, if you start investing early, you will give your money plenty of opportunities to compound interest.
How can a saving plan help me?
Most people save to invest and expand their money, whereas others save for a rainy day. The risk of fluctuating fund values is always there with market-linked funds. A saving plan is the ideal combination of life insurance and investing. Furthermore, because traditional life insurance plans are not connected to the market, you can save important goals without worrying about market volatility.
Some saving plans also allow you to take out a loan against your policy and make partial withdrawals. These saving plans provide regular payouts that act as a cash infusion just when you need it. For example, you may invest and let your money grow with Bharti AXA Life's Life Insurance saving plan while still having the peace of mind that comes with full life coverage.
What is the right way to begin with a long-term saving plan?
When it comes to returns, long-term investments always outperform short-term investments. This type of investment is beneficial if you are budgeting for your child's future financial needs, such as schooling, marriage, and a better lifestyle. You must choose one wisely as there are different long investment options available, based on your financial goals.
Curious to learn more?
2:05 Min Read Time | Aug 05, 2021
Factors Impacting Savings Plan Premium
Age is the key criterion in determining the premium you pay. However, some saving plans are age agnostic. An individual is less prone to an age-related ailment and untimely demise at a young age; therefore, the premiums are lower.
When you start saving at an early age, you can enrol in a solid saving plan at a discounted premium rate. As you get older, the insurer raises your premiums since the chances of filing a claim due to death rise.
Duration of the policy and the amount guaranteed
Previous medical history
Add-on riders like severe sickness or accidental death coverage may incur an additional premium when choosing additional benefits.
Drinking and Smoking Habits
For more details on risk factors, terms and conditions, please read sales brochure carefully before concluding a sale
Note: Riders are optional and available at an additional cost
Note: Tax benefits are as per the Income Tax Act, 1961, and are subject to any amendments made thereto from time to time
BEWARE OF SPURIOUS PHONE CALLS AND FICTIOUS / FRADULENT OFFERS
• IRDAI is not involved in activities like selling insurance policies, announcing bonus or investment of premiums. Public receiving such phone calls are requested to lodge a police complaint.
#For 30 Year Old Male, online purchase of policy excluding underwriting extra premium & GST. PT=10, PPT=5.